Global sugar output is forecast to drop in the 2003-4 season, reported German sugar and molasses analyst F.O. Licht yesterday [Thursday].

In its second review of production in 2002/03, Licht commented: “Early signs suggest that world production will fall in 2003/04. Brazil will need to process more cane into ethanol in the new season, raising hopes of lower sugar production and exports.”

“The EU may produce less as a result of a lower area sown to beet and more normal yields. No significant rise is forecast for eastern Europe, while China may have difficulties exceeding this season’s record crop.

“Australia is plagued by adverse weather while India and Pakistan suffer from excessive stocks,” it added.

However, Licht, a subsidiary of Agra Europe, increased its forecast for global sugar production during 2002-3, reported Reuters. It is now forecasting overall production at 144.6 million tonnes, raw value, up from 143.4mt in October. The increase was in part attributable to a surge in interest in sugar on the part of investment banks looking for a safe haven investment opportunity.